“Driving shared value for farmers, workers and their communities is critical to the long-term sustainability of Nestlé’s supply chains. Nowhere is this clearer than in rural communities in Côte d’Ivoire who, as a result of Nestlé KitKat commitment to Fairtrade since 2010, are more able to improve their farming practices and cocoa quality, professionalise their own cooperatives, as well as address endemic issues such as child labour and lack of decent schools. We hope such collaborations increase and deepen, as Nestlé moves to embed fair and sustainable sourcing into core business practices.”
Euan Venters, Commercial Director – Fairtrade Foundation
Supplier audit programme
All of Nestlé’s suppliers must comply with our Supplier Code. To ensure compliance, we carry out a rolling series of independent audits across their sites in the UK, delivered by Bureau Veritas, Intertek and SGS.
Since 2012, 187 independent audits of our supplier sites have been carried out across Europe, including the UK & Ireland. More than half of these are now compliant to our supplier code and the rest have corrective action plans in place.
Along with our independent compliance audits, we have asked some of our service providers to audit themselves using the Ecovadis ethical self-assessment tool.
of our palm oil bought and used in UK&I is verified as responsibly sourced and coming from a fully segregated supply chain
Traceability and assessment
To understand our dependencies and potential impacts across our value chain, it’s vital to know where our ingredients and materials come from. To achieve this, we work with our direct suppliers to map the supply chain right down to farm level.
When we have built a clear understanding of the farms and other suppliers that contribute at every stage, we assess them against our Responsible Sourcing Guideline, addressing any issues where necessary. These assessments are carried out by partner organisations such as The Forest Trust (TRT).
Ethical audit of Nestlé’s own operations
Our commitment to responsible business covers our own operations as well as those of our suppliers. Since 2005, Bureau Veritas has audited all of our head offices, factories, distribution centres and sales outlets (such as Nespresso boutiques) once every three years. The audits are based on five criteria: human rights, business integrity, environment, safety and health, and security.
Bureau Veritas has carried more than 2,000 audits of Nestlé sites globally. To date, the audits have not identified any critical issues.
The CARE audit programme
We assess compliance around human rights and labour practices, business integrity, safety and health, environmental sustainability and security through the CARE programme, which relies on an independent external audit network.
The audits take place every three years (every five years for the CARE program in the United States), and are performed by three leading independent audit companies: SGS, Bureau Veritas and Intertek. Where necessary, we introduce detailed action plans that are thoroughly and systematically monitored.
The findings are classified in three categories:
• Minor – an isolated and non-repetitive finding or minor issue;
• Major – a systematic finding or major issue or infringement against local legislation; and
• Critical – an exceptional issue, which requires immediate notification to the Nestlé Group Compliance Committee.
In 2015, we carried out 250 CARE audits across Nestlé, taking our cumulative total to 2,207 audits since 2005.
By the end of 2015, we had identified 184 CARE gaps. We have introduced corrective action plans to cover these gaps, 36 of which are now closed. The remaining corrective action plans are in process of being implemented.
Palm oil sourcing
The production of palm oil has been associated with social and environmental issues such as forced labour and deforestation. As palm oil is an essential cooking ingredient for Nestlé, we set a target in the UK to source 100% of our palm oil from sustainable sources by 2015.
We made palm oil a priority ingredient of our traceability and assessment programmes, working with suppliers and NGOs to implement our Responsible Sourcing Guideline (pdf, 2Mb) throughout our palm oil supply chain. As a result, we were able to verify that all our palm oil is fully segregated and responsibly sourced by 2012, three years ahead of target.
Over the next five years we plan to expand our responsible sourcing efforts in the UK to include commodities such as hazelnuts, vanilla and sugar. This will be in addition to our current focus on cocoa, palm oil, milk and coffee.
In 2016, we will work with our customers as well as our suppliers to ensure that responsible sourcing is ingrained across our entire value chain, from farm to fork.
This will involve collaborating closely with some of our major customers to identify responsible sourcing opportunities in more product areas, as well as developing education campaigns to raise the profile of responsible sourcing practices across our value chain.